4.2 Guarantor Financial Statements

In March 2020, the SEC issued a final rule that revised the disclosure requirements for certain registered securities under Rules 3-10 and 3-16 and introduced two new Regulation S-X rules: Rules 13-01 and 13-02. As a result of the final rule, there are fewer situations in which separate financial statements must be provided for guarantors or affiliates than there were under previous requirements (for more information about the final rule, see Deloitte’s March 10, 2020, Heads Up). In addition, we expect it to be rare for separate financial statements of guarantors or affiliates to be required; however, if such financial statements are provided, the registrant must assess whether any financial statements of the equity method investees of the guarantor or affiliate may also be required. Specifically, at the April 2007 SEC Regulations Committee joint meeting with the SEC staff, the staff indicated that if a registrant is required to provide Rule 3-16 financial statements for an affiliate, the registrant must also provide separate financial statements for significant equity method investees held by such an affiliate. The SEC staff also noted that a similar requirement would exist for subsidiary guarantors and issuers under Rule 3-10.